I 

115TH CONGRESS 

1ST SESSION H. R. 4269 

To amend the Internal Revenue Code of 1986 to eliminate the school voucher 

State tax credit loophole by limiting the double benefit of charitable 

contributions. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 7, 2017 

Ms. SEWELL of Alabama (for herself and Mr. DANNY K. DAVIS of Illinois) 

introduced the following bill; which was referred to the Committee on 

Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to eliminate 

the school voucher State tax credit loophole by limiting 

the double benefit of charitable contributions. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Public Funds for Pub5 lic Schools Act’’. 


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1 SEC. 2. ELIMINATION OF SCHOOL VOUCHER STATE TAX 

2 CREDIT LOOPHOLE BY LIMITING THE DOU3 BLE BENEFIT OF CHARITABLE CONTRIBU4 TIONS. 

5 (a) IN GENERAL.—Section 170(f) of the Internal 

6 Revenue Code of 1986 is amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(19) LIMITATION ON DOUBLE BENEFIT IN

9 THE CASE OF STATE SCHOOL VOUCHER TAX BENE10 FITS.— 

11 ‘‘(A) IN GENERAL.—The amount of any 

12 charitable contribution otherwise taken into ac13 count under this section shall be reduced by any 

14 State school voucher tax benefit with respect to 

15 such contribution. 

16 ‘‘(B) STATE SCHOOL VOUCHER TAX BEN17 EFIT.—For purposes of this paragraph, the 

18 term ‘State school voucher tax benefit’ means 

19 the aggregate amount of any State income tax 

20 credits, and excess State income tax deductions, 

21 provided to the taxpayer by a State for any con22 tribution to a specified school voucher organiza23 tion. 

24 ‘‘(C) EXCESS STATE INCOME TAX DEDUC25 TIONS.—For purposes of this paragraph, the 


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1 term ‘excess State income tax deduction’ means 

2 the product of— 

3 ‘‘(i) the highest rate of State income 

4 tax applicable to the taxpayer for the tax5 able year, multiplied by 

6 ‘‘(ii) the excess (if any) of— 

7 ‘‘(I) the State income tax deduc8 tion provided to the taxpayer with re9 spect to contributions by the taxpayer 

10 to specified school voucher organiza11 tions, over 

12 ‘‘(II) the amount of such con13 tributions. 

14 ‘‘(D) SPECIFIED SCHOOL VOUCHER ORGA15 NIZATION.—For purposes of this paragraph, 

16 the term ‘specified school voucher organization’ 

17 means any organization the primary purpose of 

18 which is the provision of vouchers, scholarships, 

19 or other funds, for the expenses of students to 

20 attend elementary or secondary schools. 

21 ‘‘(E) TREATMENT OF SIMILAR STATE BEN22 EFITS.—For purposes of this paragraph, any 

23 State benefit which is economically equivalent 

24 to a tax credit (including any payment) shall be 

25 treated as a State income tax credit for purVerDate Sep 11 2014 23:20 Nov 08, 2017 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4269.IH H4269

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1 poses of this paragraph and any State benefit 

2 which is economically equivalent to a State in3 come tax deduction (including any exclusion 

4 from gross income) shall be treated as a State 

5 income tax deduction for purposes of this para6 graph. 

7 ‘‘(20) SPECIAL RULE FOR CONTRIBUTIONS OF

8 BUILT-IN GAIN PROPERTY TO SPECIFIED SCHOOL

9 VOUCHER ORGANIZATIONS.— 

10 ‘‘(A) IN GENERAL.—In the case of any 

11 contribution by the taxpayer of built-in gain 

12 property to a specified school voucher organiza13 tion, such contribution shall be treated for pur14 poses of this title as though such property were 

15 sold by the taxpayer at its fair market value im16 mediately before such contribution and the 

17 amount of such fair market value were contrib18 uted by the taxpayer as a cash contribution to 

19 the specified school voucher organization. 

20 ‘‘(B) DEFINITIONS.—For purposes of this 

21 paragraph— 

22 ‘‘(i) BUILT-IN GAIN PROPERTY.—The 

23 term ‘built-in gain property’ means any 

24 property if, immediately before the con25 tribution of such property, the fair market 


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1 value of such property exceeds the adjusted 

2 basis of such property. 

3 ‘‘(ii) SPECIFIED SCHOOL VOUCHER

4 ORGANIZATION.—The term ‘specified 

5 school voucher organization’ has the mean6 ing given such term in paragraph (19).’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to charitable contributions made 

9 in taxable years beginning after the date of the enactment 

10 of this Act. 

Æ 


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